NORTON NOTES: Online Lotteries Adding to Death of Casinos
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By Steve Norton
CEO, Norton Management
US Lawmakers Urged to Consider Online Lotteries to Fill Virus Budget Deficits
Online lotteries offering casino games could be the final nail in the coffin of the American Gaming Industry.
First, our live casinos had to compete with online sports betting, online gaming, slots at liquor establishments, gaming at racetracks, and now a suggestion that states should write off our business that has paid incredible taxes and employed nearly 2 million citizens.
Clearly we have a temporary problem caused by the pandemic, but I don't see states entering manufacturing, retail or other businesses just because the entire country is in a crisis. This pandemic is already causing many bankruptcies, including some marginal casino companies - and there will be more to follow.
But why should it be our own host states that destroy an industry that has finally exceeded a 70 percent approval rating from our citizens, both men and women?
Can you imagine the increase in problem gambling, plus children using a parent’s credit card or bank info to play?
And with the typical lottery hold rate, as much as 40+ percent, the chance of winning nearly disappears.
Even if the states treated casino play at lower hold rates than their lotteries, I can't see many setting their slots to return over 90 percent like most casinos.
Unlike Europe, where much gaming is at sports parlors, American casinos started in Nevada and then Atlantic City, with investments of $100 million, even billions of dollars, to establish a unique form of hospitality and entertainment, now followed in many Asian countries.
Riverboat casinos were approved in five states as well as dockside casinos in Mississippi. Since then, many other states have added slots at racetracks, full resort casinos, Video Gaming Terminals at businesses that serve liquor, and many have added online options - usually sports betting and casino games - but run by licensed gaming operators, not the state.
Maybe our states should follow the private industry and lay off some of their extensive departmental payrolls rather than attack a wounded casino industry, adding more competition, that will undoubtedly remain after the pandemic is under control.